The US dollar continued to hit record lows against the euro as Fed Chairman Bernanke remained fixated on fostering economic growth—extending the downside risks for the crumbling dollar. The Chairman reassured the Senate committee that the central bank has resorted to stimulating economic growth to prevent the economy from falling into a recession, and caused the euro to climb into the 1.52 range as more rate cuts are explicitly underway. Consequently, the Swiss franc picked up the biggest gains with most major currency counterparts following suit and appreciating against the greenback. The New Zealand dollar was the only currency to tally losses against the US dollar as it faced increased resistance at recent 22-year highs.
Today’s economic releases added to the dim outlook for the US economy, as a reduction in consumer spending hindered GDP growth. Likewise significant, today’s US Initial Jobless Claims result showed that fresh unemployment insurance claims continue to gain on a week-to-week basis. Second revisions to US Fourth Quarter Gross Domestic Product expansion failed to meet expectations, as the annualized figure grew a modest 0.6 percent. All the while, recent labor market data showed Initial Jobless Claims at 373K—near recent multi-year peaks. Continuing unemployment insurance claims likewise rose, registering similar heights of 2807K.
The securities market buckled as concerns loomed for the
US Treasuries rallied as stock prices fell through and raised the appeal for risk free investment as economic uncertainty took a toll on investors. The increased appeal sent the benchmark 10-Year yield to 3.67 percent with the 2-Year yield falling to 1.84 percent.
Tomorrow’s economic releases do not show strong market moving potential as Personal Spending and Consumption are expected to hold near their previous levels, with the U. of Mich. Consumer confidence index anticipated to show a minor rise.